This blog posting is the sole national advocate, voice, official ombudsman, historian, research
reporter and online communication media for all North American land lease communities.

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a.
COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764; or gfa7156@aol.com

COBA7 Motto: ‘U Support US & WE serve U! Goal of its’ print & online media? To inform, to opine,
& to help transform & improve manufactured housing & land lease community performance!

INTRODUCTION. Exciting news from COBA7; a new national AMI $ to use for housing price point calculations; one truly unique opportunity for YOU on 29 January in ‘Luavul’, KY; some sound advice for real estate brokers marketing land lease communities; and, don’t forget to ensure YOU receive a copy of 30th annual ALLEN REPORT when it debuts during January 2019!

I.

A Major Change in Trade Media Reporting is Afoot…

Come January 2019, COBA7, a division of GFA Management, Inc., dba PMN Publishing, transitions to a 100 percent digital media platform, away from the firm’s 30 year presence as mostly print media. And while this semi-weekly blog posting has been electronic since its’ debut a decade ago, future issues of the Allen Letter and the Allen CONFIDENTIAL! (‘TAC!’) will follow suit. This also means future books (e.g. a second edition of HOUSING AFFORDOGRAPHY), along with some existing titles, will soon be available as e-books.

So, read the next blog posting or two, for more information – including the new name of this exciting online digital platform! All this is being done to better, and more broadly serve YOU, the manufactured housing industry, and land lease community real estate asset class. GFA

II.

You Earning $57,652 per year?

American Community Survey 5-Year Estimates (2013-2017) of U.S. economic growth tell

• “Nationally, median household income (a.k.a. Annual Median Income or AMI) increased 1.9 percent, from $56,587 to $57,652 in inflation-adjusted dollars between the two five-year periods, i.e. 2008-2012 & 2013-2017)” And “The percentage of people in poverty decreased from 14.9 percent to 14.6 percent.”

Interestingly, these positive national economic trends were mirrored in all three geographic county groups; specifically,

Two things. While national AMI hovers around $57,652 know that many, if not most homeowner/site lessees living in land lease communities nationwide, appear to have AGIs (i.e. Annual Gross Incomes) around $36,000. That’s why the oft-used, two-sided ‘Ah Ha! & Uh Oh! Formula’ worksheet ‘crunches the numbers’ in two siting scenarios (scattered building sites conveyed fee simple & in-community on rental homesites), four ways: two @ ‘affordable’ perspective, and two @ ‘risky’ perspectives; the difference being whether household utility expenses are included (in ‘affordable’ instances) in said calculations, OR NOT, as in ‘risky’ instances scenarios. Accordingly, $36,000 AMI/AGI is featured on one side of the form, and the recent past $51,229 AMI/AGI on the verso side. For a FREE copy of said worksheet, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and request it.

The other thing. Say what you will about President Trump, but the AMI increase, and declining poverty rates, are certainly indicators of his actions to Make America Great Again!

And there’s more from the American Community Survey. “Almost 87 percent of the total U.S. population lived in 1,253 mostly urban counties….Median income in those counties was $59,970 for the most recent five-year period. The poverty rate was 14.3 percent. For individual counties, median income ranged from $20,795 to $129,588 and poverty rates ranged from 2.9 percent to 48.2 percent.”

III.

What Will YOU be Doing 29 January 2019?

29th is a Tuesday, the day before the Louisville MHShow begins at KY State Fairgrounds.

It’s also the day on which a Manufactured Housing Manager professional property management training & certification class is planned. If interested in attending the MHM program, from 9AM till 4PM, phone (317) 346-7156 to register. Costs only $295.00 per MHM candidate. No testing. MHMs receive a copy of Landlease Community Management and other training materials, plus their gold MHM lapel pin & official certification document!

There’s also something exciting being planned for the afternoon of 29 January 2019. And frankly, if interested, YOU can have a ‘say’ in what takes place between 1 & 5PM.

During past decades, manufactured housing executives and land lease community owners have oft asked me to plan and host informal but structured gatherings of like-minded businessmen and women. And we’ve done so. These have been private group meetings during MHCongresses in Las Vegas; at Saddlebrook Farms in Grayslake, IL.; during SECO conferences in Atlanta, GA.; on-site in land lease communities in FL, PA, and elsewhere; and most recently, annual MHALive! ‘open discussion’ think tank-like sessions at the RV/MH Hall of Fame in Elkhart, IN. So there’s plenty of precedent for what I’m suggesting here….

We’ve reserved a board room at a popular name brand hotel near the Louisville MHShow venue. What I need NOW is input from YOU, as to what topics you’d like to cover during four 50 minute sessions between 1 & 5PM on 29th of January. We need four stimulating and thought provoking topics. Here’re several possibilities to get YOU thinking and responding:

When a veteran owner/operator of land lease communities was recently asked if he had advice for real estate brokers specializing in the marketing of this income-producing property type. This is what he penned:

“…tell brokers to stop encouraging sellers to sell for ridiculous prices (Which will eventually hurt the industry anyway); stop telling communities with no ‘sales price tag’ (i.e. ‘Call in with $ offers!’); stop encouraging sellers to accept offers from buyers who haven’t seen or visited the property (Assuming they’ll negotiate during the due diligence period); quit telling buyers, “ALL you have to do to increase cash flow and increase property value is buy new manufactured homes (Takes far more than that!); and, bring back actual 10-12 income capitalization rates.”

Pretty much says it all doesn’t it?

V.

30th anniversary (2019 ALLEN REPORT,
a.k.a.
‘Who’s Who Among Land Lease Community Portfolio Owners/Operators Throughout North America!’

COBA7 affiliates at the Options II & III levels, as well as land lease community owners/operators who took time to completely fill-in the ALLEN REPORTquestionnaire this past Fall, will receive copies of this seminal document – the longest running statistical compendium published in the manufactured housing industry today!

Don’t wait until January 2019 to order your copy! Phone (317) 346-7156 to affiliate with COBA7 today. You’ll be glad you did. This edition is chock full of timely and interesting information about the realty asset class. For example, 25 portfolio firms have been dropped from this year’s report, for all the usual reasons. And we’ve added more than a dozen ‘new names’ to the 500 list of owners/operators.

Perspective. ‘Land lease communities, previously manufactured home communities, and ‘mobile home parks’, comprise the real estate component of manufactured housing.
This blog posting is the sole national advocate, voice, official ombudsman, historian, research reporter and online communication media for all North American land lease communities!
To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764; or gfa7156@aol.com
COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print & online media? To inform, to opine, & help transform & improve manufactured housing & LLCommunity performance!

EVERGREEN ISSUES of MANUFACTURED HOUSING
“Evergreen content is content that is always relevant…like evergreen trees retain their leaves all year. Interesting and relevant content, that does not become dated, is necessary in order to be found online by search engines.” Likewise, evergreen issues are issues always present and relevant, as in the case of manufactured housing & land lease communities, where we have several. The following paragraphs identify a half dozen evergreen issues. If you think there are more, please let us know via gfa7156@aol.com or via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Who’s really responsible for the proper, safe, and secure installation of HUD-Code manufactured homes when sited on scattered building sites conveyed fee simple, and on rental homsites within land lease communities? Depends on who one asks. Installation manuals shipped with every new home, in this industry observer’s opinion, leaves the issue (question) open to interpretation and application, e.g. factory rep, traditional (street) MHRetailer, licensed installer, homeowner installing on scattered site conveyed fee simple, & land lease community owner dealing with his own property.

Department of Housing & Urban Development (‘HUD’), the federal agency that regulates manufactured housing, resists overtly promoting this type factory-built housing as the attractive, quality, non-subsidized, energy efficient, transportable, affordable housing it is! On one hand, via its’ plethora of housing support programs (e.g. Community Development Block Grants, HOME Investment Partnerships, Assisted Living Conversion Program, and many temporary programs) HUD is quick to direct taxpayer monies everywhere else, but not towards manufactured housing as affordable housing.

Existing manufactured housing stock is aging faster, in toto, than replacement stock can be fabricated and shipped from more than 100+ factories nationwide. In addition, some estimate there’re 250,000+/- vacant rental homesites in land lease communities able to site new manufactured homes if they – and chattel capital for home loans, were readily available today. Not. So, with each passing month, the ability to refresh and fill land lease communities, as well as scattered building and rental homesites, falls further and further behind.

HUD-Code manufactured homes, as well as modular and park model RV units, sited within land lease communities continue to be ineligible for real estate-secured home financing, forcing said homeowners/site lessees to pay, on the average, three points or more for their home loans, than if same home was sited on a scattered building site conveyed fee simple, with the homeowner owning underlying realty. Over the decades, there have been unsuccessful efforts to mitigate this inequity, via long term leases, etc., but nothing, to date, has ameliorated the issue.

Relative to the sale of new and resale manufactured homes, using chattel or realty-secured mortgages, there’s a longstanding practice of selling customers ‘more house than they can afford’, by not including annual household utility expenses in the target 30 percent Housing Expense Factor. Doing this makes for a ‘risky’ transaction. However, when the home mortgage monthly PITI (principal, interest, taxes, insurance)payment calculation includes household utility expenses in the target 30% HEF, the transaction becomes affordable, as customers buy ‘the house they can truly afford’.

Most enduring evergreen issue afflicting HUD-Code manufactured housing and land lease communities is the oft negative public image of this symbiotic pairing (i.e. roughly half of all new manufactured homes are sited on rental homesties within the unique, income-producing property type). Why negative and enduring? Trailers and mobile homes of the 1950s & 60s are still around. And forget their presence is a reality check as to what the U.S. homeless population would be without them! Plus, there’s a predatory equity play characteristic of investors overpaying for land lease communities, then ‘jacking site rents’ as part of their ‘get rich quick’ scheme. And negative public image continues….

Oh, there are more evergreen issues germane (‘closely associated with’) manufactured housing and land lease communities. Here’re two: absence of a secondary market facilitating the valuation and sale of manufactured home within and outside land lease communities; and, lack of a secondary market facilitating the sale of seasoned chattel loans to free up capital for more new home sales transactions. Then there’s the lack of emphasis on professional property management training and certification throughout the realty asset class! Today, slightly more than 100 Certified Property Manager (‘CPM’) members of the Institute of Real Estate Management (‘IREM) claim an affinity to manage land lease communities. And there’re nearly 1,500 certified Manufactured Housing Managers (MHM), and fewer than 200 Accredited Community Managers (‘ACM’) spread among 50,000+/- properties nationwide! Not nearly enough!

You are invited to participate in this review and conversation of evergreen issues related to the manufactured housing industry and land lease community real estate asset class! See contact information at the beginning of this blog posting.

This blog posting is the sole national advocate, voice, official ombudsman, historian, research reporter and online communication media for all North American land lease communities!

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764; or email via gfa7156@aol.com

COABA7 Motto: ‘U Support US &WE Serve U!’ Goal of its’ print & online media = to not only inform & opine, but to transform and improve manufactured housing performance.

INTRODUCTION. A belated Thanksgiving Greeting to All of You! As I edited blog # 510 yesterday morning, I identified a few Blessings for which Carolyn and I are Thankful this year. Besides being appreciative of reasonably good health as great grandparents, we looked forward yesterday, to more than a dozen family members coming to our home to share Thanksgiving dinner with us. And then there’re our family’s business interests; all of which appear to be enjoying prosperity, right along with our improving national ‘Make America Great Again!’ economy. Friends and distant relatives? We have many, and look forward to communicating and visiting with all of them, as often as possible.

Yes, we are indeed a blessed people and nation. So much to be Thankful for this year! GFA

Now, enjoy the blog narrative that follows here.

MUSINGS
The hectic Fall meeting season is finally over. Think Networking Roundtable, MHI’s annual meeting, SECO conference, NCC’s Fall Leadership Forum, & RentManager’s annual soiree. There are more, but you get the idea. The seasonal holiday season is now in full play. Hope you enjoyed a memorable Thanksgiving celebration. We sure did, with more than 15 family members present for dinner at our home on Thursday. Much to be thankful for these days, despite difficult times and circumstances!

This has also been a tumultuous couple weeks for two popular manufactured housing leaders. Joe Stegmayer, is no longer chairman of Cavco Industries, Inc., but now heads another key department in the firm. Joe is also chairman of MHI & the RV/MH Hall of Fame. And Jay Zandman, LLCommunity owner, an insurance agent with Manning & Novick Insurance – recently acquired by Brown & Brown, has retired early. Jay is one of the founders of the rapidly growing SECO conference.

Did you realize the manufactured housing industry has slipped from the ‘new home production pace’ needed to eclipse 100,000 new HUD-Code homes shipped during year 2018? Official new home shipment total for September 2018 was 7,519 units! That’s below September 2017pace of 7,580; and way below the 9,157 units shipped during August. What’s going on? I don’t know, and the two manufacturer-dominated national advocates MHI & MHARR aren’t talking. We should be doing better!

30th anniversary ALLEN REPORT questionnaires are ‘in’, and we’ll compile portfolio data during next couple weeks. That gives me two weeks to pen the narrative, and for pre-press to craft the ranking of 100+ land lease community portfolio owners/operators domiciled in North America. Report will be enclosed in January’s Allen Letter to Option II & III COBA7 affiliates. Want a copy of the 30th anniversary ALLEN REPORT? Phone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Best & Last One?

On 27 November, I’ll be in Washington, DC. Attending the National Housing conference Focus will be on ‘Solving the Affordable Housing Crisis in the U.S. Today’ This is my second visit, and I expect to be frustrated again, as one of the few Free Enterprise businessmen & women in the audience, amongst many public policy ‘housers’. But that’s OK. Why? Because they’re now seriously interested in making manufactured housing & land lease communities part of the affordable housing solution they seek!

Something for you to consider. On Tuesday, 28 January, COBA7 will host the one day Manufactured Housing Manager professional property management training & certification class in Louisville, KY. That’s the day before the Louisville MHShow begins. Only $295/MHM candidate. Join nearly 1,500 MHMs already owning and managing land lease communities throughout the U.S. & Canada, by being in this class! To do so, simply phone (317) 346-7156 to register. Best available PM training available today!

While the MHM class is taking place, I plan to meet with manufactured housing & land lease community veterans who realize they have personal and corporate legacies to share! And if they don’t pen their memoirs (i.e. short stories & adventures) now, it’s likely no one else will either. So, if spending a few hours learning the legacy writing basics with me interests you, let me know via email: gfa7156@aol.com Then I’ll send you a free copy of the helpful booklet, ‘Who Will Preserve Your Legacy? Answer: You!’

Are you reading the Allen Letter professional journal every month? It is the ONLY national print media focused on industry information and practical HOW TO needs of land lease community owners and managers. $134.95 Option I affiliation with COBA7 gets you the newsletter! $544.95 Option II affiliation gets you the newsletter and a dozen Signature Series Resource Documents, e.g. ALLEN REPORT. And $944.95 Option III gets you all this, plus the Allen CONFIDENTIAL! newsletter. Phone (317) 346-7156.

OK, enough musings for one blog posting. So much more to share with you though. Like the increasingly complicated MHIndustry alphabet of MHARR, MHI, COBA7 & NAMHCO. Becoming like FUBAR (‘Fouled up beyond all recognition!’), or SNAFU (‘Situation normal, all fouled-up!’), all on our way to creating a fasgrolia (Huh?). According to ‘Mrs. Byrne’s Dictionary of Unusual, Obscure & Preposterous Words’ (by Josefa H. Byrne), 1974; a ‘FASt-GROwing’ Language of Initials & Acronyms’. Get it? FASGROLIA. Ha!

INTRODUCTION. Much to pay attention to in this week’s blog posting (#509). How I favor representing you to the affordable housing crowd in Washington, DC., rather than networking at MHI’s NCC division/s annual Fall Leadership Forum. Do you realize new HUD-Code housing production, during September, fell well off the pace to shipping 100,000 new homes by year end? And there’s a ‘breaking story’ I can only titillate you with at this time. Finally, a couple responses from last week’s OPEN LETTER to My Friends in the MHIndustry.

I.

To Party or To Persuade?

‘Why I did not participate in MHI’s NCC Division’s Leadership Forum this week.’

The choice has been clear for awhile. It was clear last Fall (2017), when several manufactured housing industry businessmen (Spencer Roane, MHM; Paul Bradley, MHM, & me) attended the National Housing conference in Washington, DC., to input: ‘Solving the U.S. Affordable Housing Crisis’. And it’s just as clear this Fall, as I prepare to participate in the 2019 NH conference. Frankly; as a small businessman, I cannot afford a high-priced networking conference in Chicago one week, then participate in an affordable housing solutions conference the next, in Washington, DC. It’s that simple.

Bottom line for me? Far more important to persuade ‘housers’ – including legislators and regulators, of all stripes, how HUD-Code manufactured housing& land lease communities make for the most practical of affordable housing solutions available in the U.S. today! Someone, in my opinion, has to step forward to make the case – and it’s best done by those with ‘skin in the game’, someone not ‘paid’ to do someone else’s bidding.

So, Yes, I missed seeing many friends and colleagues at MHI’s NCC division’s Fall Leadership Forum in Chicago; but it’s money much better spent advancing the cause of manufactured housing – with an eye to further increasing the new home shipment volume we’ve experienced YTD 2018. Anyone disagree with that line of thinking? Didn’t think so.

Speaking of money. The funds used to pay for these trips to Washington, representing manufactured housing & land lease communities among affordable housing ‘housers’ is coming solely from COBA7, a division of GFA Management, Inc., dba PMN Publishing. No one else! Point? There needs to be an influx of $, from somewhere, if this good work is to continue. If not; well, our industry & asset class presence & favor, among the affordable housing crowd, will diminish rather than grow. Do we want more new HUD-Code homes shipped than at present? If interested, phone me @ (317) 346-7156.

If not, you should be, and here’s why. The number of new HUD-Code homes shipped during September 2018 was 1,638 fewer than shipped the previous month, i.e. 9,157 (-) 7,519 (=) 1,638. And not only that, this September new home shipment total is also 61 units fewer than shipped during September 2017! What’s happening?

Another way to look at it is this. If we don’t do better than shipping 7,519 during each of the next three months (October, November & December), our possible year end total of new homes shipped 3,000+/- fewer than the 100,000 new HUD-Code homes anticipated during the past several months, i.e. 7,519 (Sept.) X 3 months = 22,557 (+) 74,354 new HUD-Code homes shipped YTD (=) 96,911 or 3,000+/- homes fewer than targeted!

III.

D&R Shipments to End, On-site Inspections to Begin?

HUD-Code Housing Manufacturers to Eschew D&R Shipment Policy of Past 70 Years, in Favor or On-site Inspections of New Home Site Preparation, Home Installation & Setup!

It’s certainly not a ‘done deal’ yet, but the Big 3-C HUD-Code housing manufacturers are talking about how to curtail the astronomical home service and warranty $$$ expenses oft caused by poor to marginal site preparation, home installation and setup.*1

How ‘big’ is the $$$ problem? Informed sources put the total, when talking about the Big 3-C HUD Code housing manufacturers, at hundreds of millions of dollars per year!
So, what’s the solution? That’s the next step. Federal regulation of installations hasn’t worked, and there’s been no real or effective self-policing to date; but there are practical alternatives:

ENDING THIS ‘BREAKING STORY’ HERE, FOR THE TIME BEING. Will likely continue as the lead story in the December issue of the Allen Letter professional journal. Now, picking up where this story left off in the previous paragraph…

And there are likely other implementation alternatives not identified here. For the time being, it’s enough information, and to know, this is becoming, if not already, a Major Hot Topic among HUD-Code housing manufacturers…finally.

III.

Responses to ‘An OPEN LETTER to My Friends in the MHIndustry’

Relative to leadership of the manufactured housing industry & land lease community real estate asset class:

“Oh! the community side of the business has a leadership gap? Nope. There are plenty of leaders…(just) in their own businesses. The void really is leaders willing to step onto the national scene to lead the industry as a whole. You named many of them! But where is the next generation?

I think they are there, they just need a push. My solution is simple. Since the industry has rebounded, it’s time for the states to return to sending expense-paid delegates to MHI and other national gatherings. That is where the last generation stepped out of the shadows, both as community and retail leaders.”

These insightful remarks and suggestion offered by a retired state association executive still passionately interested in the healthy future of the industry & property type.

And then there’s this poignant tale from a long retired entrepreneurial business executive.

“Mine was a sudden, and complete break from participation. I was bought out, stayed to help for a couple years, retired to caretake my wife and travel in our RV.

My legacy lies in the products people are still enjoying, the few real friends from the MHIndustry that still call/speak/write to me and in the successes and happiness I see in so many of our former employees.

To you I say, stay or go; and in either case, your curiosity will serve you George. You have your family and your legacy. So, when you see it is time, you will take a walk away, not look back, and go to that which is next. No fear my friend.”

That last line certainly sets the stage for me to say, ‘Now is the time!’ But it isn’t. Geesh; before year end I’ve got to compile and publish the 30th anniversary ALLEN REPORT, attend the National Housing Conference in Washington, DC., representing manufactured housing & land lease communities to the affordable housing ‘housers’ from throughout the US., and more….

Speaking of the 30th anniversary ALLEN REPORT. If you’re reading this and are a property portfolio owner/operator of land lease communities, it’s not too late – just yet – for you to submit your property and rental homesite counts for inclusion in said report. Just do so via gfa7156@aol.com. And if you completely fill out the questionnaire (Ask for it when you email me) and return it, you’ll receive a FREE copy of the ALLEN REPORT when it is distributed during January 2019. That’s an immediate savings of $544.95!

An OPEN LETTER to My Friends in the Manufactured Housing Industry &
Land Lease Community Real Estate Asset Class

In 1978 I discovered professional property management (‘PM’) as a career alternative and opportunity, when working for a firm owning/operating apartment communities, mobile home parks, nursing homes, farms and mines. I was not pleased, however, when my boss reassigned my PM responsibilities from apartments to mobile homes. But know what? That marked the beginning of my 40 year experience in land lease community management and ownership, as well as writing and publishing books, newsletters, and this blog.

Now, in 2018, I’m contemplating what to do with the rest of my career and life. I no longer own land lease communities; have relinquished responsibility for teaching the Manufactured Housing Manager (‘MHM’) PM training and certification program; and think I might have a home for future Networking Roundtables – or not. So, for the time being, I continue to pen and post a weekly blog, and publish and distribute two COBA7 affiliate-supported monthly business newsletters: the Allen Letter professional journal & the Allen CONFIDENTIAL!. But what about ongoing research required for the annual ALLEN REPORT, National Registry of ALL $ Lenders; and, directories of trade groups, GSEs & NGOs, trade publications, and freelance consultants? It’d be downright wrong to allow 30+ years of such information to disappear overnight, for lack of interest and effort.

While I shared several personal memoirs in SWAN SONG last year, here’re more memories from past decades:*1 Hopefully, these and more stories will eventually find their way into print as a legacy biography or autobiography.

• Returning 350 rental manufactured homes, scattered among four ‘mobile home parks’ in two states to profitability, by changing from monthly to weekly rent collection. And later learning the advantages to collecting site rent by mail.

• Acquiring my first (then) manufactured home community of 500 rental homesites, with only 20% occupied, for $400,000 – then selling it two years later for $2 1/2 million cash. Ah, the reward of risk taking and ‘sweat equity’.

• Penning & self-publishing Mobile Home Park Management in 1988. Now in its 6th edition as Land Lease Community Management, and centerpiece for the popular Manufactured Housing Manager program, with nearly 1500 MHMs trained and certified to date throughout the U.S. and Canada.

• Collecting & continually updating an exclusive, confidential data base identifying 500+/- land lease community portfolio owners/operators in North America; and making said list available for direct mail contact and marketing by lenders, insurers, investors, and more.

• Articulating the asset class’ Industry Standard Chart of Accounts, including 19 Operating Expense Ratios and widely cited Allen Model OERs. This resource compiled while on active duty, as a Marine officer, based in Honduras during Operation Desert Storm.

• Hosting a strategic planning meeting of 19 manufactured home community owners intent on improving realty asset class’ national advocacy and representation, before the mini-REIT wave of 1994 began. Their Industry Steering Committee was the forerunner of MHI’s National Communities Council division.

• Co-authoring Development, Marketing & Operation of Manufactured Home Communities, with David Alley & Edward Hicks. First such tome in more than 20 years! Still sought and bought, via amazon.com, after more than 25 years.

• Editing How to Find, Buy, Manage & Sell a Manufactured Home Community. First and only comprehensive text on buying, valuing, selling this unique, income-producing property type. Oft referred to as the ‘bible’ of community acquisition. Now out of print, but used copies sometimes available at amazon.com

• Crafting, with daughter Susan McCarty, the ‘Valuation Calculation Worksheet’, or VCW, a do-it-yourself valuation tool for any size and condition land lease community in North America. And later added to this, an ‘ABClassification’ form, for measuring and labeling A, B, C or D quality levels on this income-producing property type. Replaced long defunct Woodall Start System, last updated in 1976.

• Articulating the ‘Ah Ha! & Uh Oh! Worksheet’, for estimating ‘affordable’ & ‘risky’ purchase prices of new & resale homes, of any type, on building sites conveyed fee simple, and placed within land lease communities on rental homesites.

• Launching of Community Owners (7 Part) Business Alliance, or COBA7, as a division of GFA Management, Inc., dba PMN Publishing. In reality, a rebranding of heretofore ‘free’ products & services long provided by GFA Management, Inc.

• Defining affordable housing (‘AH’), to include Low Income Housing & Very Low Income Housing, as well as all six measures of AH, being HEF, HOI, HW, WH, IHVR, & ‘One, or anyone, who believes they live in affordable housing’

That’s somewhat ‘up to you’. The following paragraph (actually two) concludes the November 2018 issue of the Allen CONFIDENTIAL! business newsletter. Not asking you to agree with me; just read and ponder what the next decade – and longer, will look like if

“I’m concerned…about the dearth of asset class leadership among land lease community owners/operators nationwide. I have never viewed myself as such a leader, rather as a gatherer and purveyor of statistics and information via COBA7….Furthermore, I don’t see LLCommunity representation and advocacy, envisioned by aforementioned 19 owner/operator peers 25 years ago, faring any better! (Their hope) MHI’s NCC division…is insular (‘detached, provincial, narrow-minded’) & .(For proof, read page # 97 in SWAN SONG, to compare NCC’s contemporary presence with their 1993 Mission Statement & Objectives). And MHARR has never figured into this leadership void, as their membership is strictly limited to HUD-Code housing manufacturers. Now NAMHCO appears on the national advocacy (lobbying) scene. Too early to judge their leadership potential.”
&
“As I travel nationwide, I meet and interact with individuals who’re already bona fide leaders in their own right (i.e. entrepreneur owners/operators & some salaried PM executives). But therein lies their constraint: ‘taking care of (their) business first’! Here I’m thinking the likes of Mike Sullivan, CPM; Paul Bradley, MHM; Spencer Roane, MHM; Steve Adler; Stephen Braun; Brian Fannon, CPM; Randy Rowe, Kevin Shaughnessy, et .al. So, there’s talent afoot, and the need is great, but as a realty asset class we continue to be hopelessly (?) adrift.”

Frankly, I hope this blog posting becomes a topic of lively conversation at the upcoming NCC Fall Leadership Forum, 7-9 November, in Chicago, IL. It should be. Why there? I understand that event attracts ‘hundreds’ of participants, while NCC membership meetings, in my experience as a founding board member – just resigning last month, attract maybe a dozen owners/operators, way down from multiple dozens two decades ago. Hey, a leadership renascence,, among land lease community owners/operators, has to begin somewhere….

End Note.

1. To order a copy of SWAN SONG, ‘George Allen’s History of the Land Lease Community Real Estate Asset Class (1970-present day) & Official Record of Manufactured Housing Shipments (1955-present day)’, for $34.95 ()postpaid), phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

If you or your firm owns and or fee manages a minimum of five stand alone land lease communities or 500+ rental homesites (in one or more properties), the portfolio qualifies to be included in the 30th anniversary ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Community Owners/operators Throughout North America!’. To input this seminal document, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request a copy of the questionnaire used to compile this data. Then complete it in full ASAP, and return via FAX, to (317) 346-7158. Completely filled-in questionnaires get you a FREE copy of the 30th ALLEN REPORT in January when distributed as a lagniappe in the Allen Letter professional journal. Questions? Email: gfa7156@aol.com

INTRODUCTION: Here we go again! I’m deep into compiling & penning the 30th anniversary ALLEN REPORT (due out as a lagniappe in the January 2019 issue of the Allen Letter professional journal – to COBA7 Option II & III affiliates), and along comes a unique opportunity to articulate a manufactured housing market indicator needed by the industry and realty asset class for decades! I’m talking about ((maybe) a Manufactured Housing Affordability Index or MHAI. When the ALLEN REPORT is finished (no simple task), I’ll turn my attention to details of this much-needed research/reporting tool!

In the meantime, if you’re a land lease community owner/operator with a property portfolio containing five or more communities and or 500+ rental homesites, but haven’t yet submitted the ALLEN REPORT questionnaire, please phone (317) 346-7156 and request a copy of the form. Your reward? A FREE copy of the 30th anniversary ALLEN REPORT ( a savings of $544.95) – IF you complete said questionnaire in full! Then FAX it to (317) 346-7158 ASAP!

Oh, it’s not yet ready for public announcement, but is close – maybe! When it does debut, it’ll most likely be via COBA7’s the Allen CONFIDENTIAL! business newsletter, then the Allen Letter professional journal. To receive either or both manufactured housing & land lease community – focused print media publications, affiliate with the Community Owners (7 Part) Business Alliance or COBA7, via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. You’ll be glad you did! Hundreds already so-affiliated!

What’s a ‘housing affordability index’ do? It measures whether or not a typical individual or household earns enough annual gross income (‘AGI’) to qualify for a chattel mortgage on a new HUD-Code manufactured home at the national, or regional (i.e. local housing market) defined by postal zip code) levels, based on most recent manufactured housing price, mortgage rate, and income data – and when/where appropriate, area median income (‘AMI’) levels characteristic of various local housing markets.

Bottom line? The Manufactured Housing Affordability Index (‘MHAI’) will be – if it materializes, a means to track, over time, whether manufactured housing is becoming more or less affordable for the typical individual or household prospective homebuyer/site lessee, & homebuyer buying and permanently installing a manufactured home on a scattered building site conveyed fee simple.

That’s all for now. Will tell you more as time passes and the MHAI formula is proofed and tested for use throughout the manufactured housing industry and among land lease communities nationwide..

“I think I forgot to tell you Amen on this! Also, two of my friends in the MHBusiness think the same. And they are working ‘where the rubber meets the road’! Thanks for all you do George.” This from a major land lease community portfolio owner/operator who’s also been a major independent (street) MHRetailer in the Midwest for decades.

And then this from a now retired independent (street) MHRetailer – who prefers the term ‘dealer’, who also owned (back then) several manufactured home communities – and how he experienced the consequences of manufacturer and property consolidation back then. Only change to his narrative is, I’ve updated the trade terminology following the first sentence…gfa:

“Yes George – 372,943 new HUD-Code homes were shipped (in 1998), and many mobile home parks had a one year waiting list. The only ways for a (Midwest) Street Dealer, like me, could get a home into one was:

1) Pay full lot rent on any and all vacant rental homesites the land lease community owner/operator had, in order to allow one’s customer to fill out an application for said site; and if accepted, expect to give the park manager, anywhere from $500 to $1,000 (in cash) for their cooperation. (Known, back then, as a spiff or birddog fee)

2) One could pick out an occupied rental homesite, and the manager would evict them to create a spot for your customer. (Now, that’s a new one on me. gfa)

3) We would ‘temporarily’ set the customer’s home on one of the ‘overnight’ spots we owned, then move it to a permanent rental homesite when a vacancy occurred.

4) If park manager had a friend, sister, brother or distant cousin who wanted a new home, it was understandably beneficial to sell it to them at absolutely net dealer cost.

‘Those were the good old days!’ To which my correspondent added: “You can’t fix stupid, and greed is hard to overcome – But when you put the two together, it’s the beginning of the end!”
***

INTRODUCTION: I learned years ago, if I don’t record stories from my past, soon after they occur, the memories are lost forever. Childhood recollections (casting toys in my father’s foundry); college (meeting Carolyn); father to Susan & Adam; combat in Vietnam (seeing bodies of Russians along the Ho Chi Minh trail); various jobs in factory-built housing (plant manager) and property management (of land lease communities); and becoming a grandfather, and now great grandfather, for the first time, to name just a few personal experience arenas.

What follows are some otherwise lost memories, not recorded for posterity, but penned from my recollections as their friend and industry observer. Enjoy – and be inspired to begin thinking of preserving your own, or corporate, legacy for family, friends, and associates.

I.

Why Emphasis on Legacy Writing?

Pick up Latest Issue of the Allen Letter professional journal & Look at the ‘In Memoriam’ block of names featured in every issue.

There you find the names of friends and associates, in the manufactured housing industry in general, the land lease community real estate asset class in particular, who’ve died during the past few years. Not every decedent we know is written into this list, mainly those I knew who’ve enjoyed regional or national personal and business rep and recognition. Every one of these individuals, and many more, have lived unique legacy lives worth preserving and sharing. Now, some did but most did not; and as a result, here’re a few examples of what’s been lost to eternity to date.

• Jim Overstreet of Phoenix Homes in Pennsylvania. In my opinion, Jim had an eccentric slant on life. All one had to do was visit his warehouse office, heated with a 55 gallon drum lying horizontally atop firebricks, burning firewood – and surrounded by vintage rocking chairs…for meetings with lenders ‘on his turf’. Seriously. And the legend goes on from there…like the vintage ‘trailer tires and parts’ scattered around the warehouse. It was like stepping back in time….

• Ron Richardson of OK & NV. He went to his grave without sharing the tale of how and why he named his firm, and by association, his land lease communities, Ballerina Enterprises. I know the story – it had to do with his first wife being a ballerina. Wives number two and three, as some will recall, were just as exotic in their own rights, but differently. And no one really knows the yarn behind his rare and never ending supply of rare industrial grit….

• George Goldman, as many of you know, thanks to earlier blog postings, did leave us his autobiography: Thee Road Less Traveled. A fascinating tale, available from amazon.com It’s penned like we expect from a no nonsense Chicago businessman.

• Kris Jensen, Jr. During the final decades of Kris’ career and life, ‘everyone in MHI circles knew him and his Connecticut-based Jensen Communities. Unfortunately, he did not pick up where his father, Kris Jensen, Sr., an immigrant from Denmark, left off in his autobiography, A Danish American. (An engaging ‘read’ long out of print). Perhaps someday we’ll learn ‘the rest of the story’ from yet another descendent of this 2009 RV/MH Hall of Fame member. Kris Sr. was also inducted into the RV/MH Hall of Fame, but 37 years earlier in 1972!

• Harrell Cohron. Ah yes, in my opinion, another gem in the land lease community crown of memorable owners/operators. Harrell and his identical twin Darrell, with the help of a family member, authored The Trailer Twins. Copies available from the RV/MH Hall of Fame – where the twins also happen to be 2018 inductees. Oh the stories, those of us who’re intimates, could share. Rumor has long had it the Cohron twins built most of their 1,500 rental homesites ‘out of pocket’. If true, that’s a feat!
.
• Myles Sampson was truly a prince of a guy. We were close in age, when he passed. His family has been involved in commercial real estate in the Pittsburgh, PA., area since the Revolutionary War! At one point he and his brother hired a real estate broker to simply ID and market dozens of small parcels of realty not otherwise picked up during past transactions. A missed legacy tale opportunity!

• Bud Zeman. For decades, widely known throughout the upper Midwest. At times controversial, but in my opinion, always colorful and fair (to me). So much so, I penned a poem in his honor back in 2010. It’s titled: ‘A Toast to the Community Owner!’ and is featured as Figure J in SWAN SONG. Today, Bud’s son Ed carries on the family business our of their Chicago offices. Perhaps he’ll pen his family’s legacy during years to come.

• Boris Vukovich and I met only once, but he was an unforgettable person. When he died, his family published what I refer to as a photoautobiography. It’s only a few pages long, but is replete with individual and family photos taken over decades; also a narrative describing Boris’ exciting life as an immigrant turned successful businessman, in our line of work, and based in Colorado..

• Chuck Catalano. Sorry to say, a long time client and friend in the business, but left us nothing to remember him by. A clear example of the ‘loss to all’, when someone passes without pennning his or her legacy for us and those to come.

• LA. (Bud) Meyer. One of the first businessmen I met when relocating there in the early 1970s. A developer of land lease communities, ‘with tales to tell’, but like Chuck, did not do so, and now these Lessons Learned have been lost to the ages. Bud and Pat Meyer were also one of the most well known husband and wife management teams in the state of Indiana.

• Craig Fulmer founder and patriarch of Heritage Financial in Elkhart, IN. A long time friend, who fashioned his firm’s offices and his home, within the turn of the (previous) century YWCA building. And early on, during the seller-finance cycle of our asset class, it was commonplace to hear owners/operators talk of ‘making the pilgrimage’ to Heritage, to learn the basics of contract sale of manufactured homes. But no legacy writings here either, sad to say.

• Judy Carr. Now, if anyone – on this list and elsewhere, had a history story to tell, paralleling that of the manufactured housing industry, it was Judy – and her husband, Bill They were there ‘almost at the beginning’, as freelance consultants to independent (street) MHRetailers, and later, LLCommunity folk. But like so many others, no legacy writings left behind to date – sharing their Lessons Learned, and more, in and out of Iowa.

• Maurice Wilder of FL. All I have in our corporate files about Maurice, is a collection of stories about herding ostriches and giraffes in central Florida. And I know he was a longtime friend of yet another Midwest icon, Warren Huddleston., But neither man left us their story, so we’ll ‘never really know’….

• Mac McClanahan, veteran community manager, and late in life – freelance consultant, was everyone’s ‘friend in the business’. His untimely death, a couple years ago left a void among Indiana land lease community folk. And as many times as I encouraged him to pen his property management story, he never got around to it – that I know of. Heck, we all learned something from Mac; now we can’t….

• Steve Pappas, CPM. By coincidence, we authored texts describing (then) mobile home park management, back in the mid-1980s. So, for awhile we were kinda competitors, but friendly ones. Steve ended his long career fee-managing income-producing properties in AZ, but never updated his first book, or took time to pen his legacy. Another loss to all of us.

• Tom Horner, Jr., former pro football player, longtime KS & MO community owner/operator. Years ago, 9circa 1996) Tom penned the basics of his ’21st Century National Manufactured Home Landlease Community Rating System’. It’s still available for reference, as Appendix N in the J. Wiley & Sons text: How to Find, Buy, Manage, & Sell a Manufactured Home Community, George Allen, 1996. Book is long out of print but used copies often available via amazon.com

• Howard Walker. Now, if anyone had a lifelong tale worth sharing, Howard sure did. Long a protégé of Sam Zell of REIT – ELS, Inc. fame, he had more pithy stories to tell than he could remember. Ask Nathan Smith how Howard ‘one upped him’ after Howard’s death. Read Sam Zell’s autobiography, Am I Being Too Subtle?, to learn why Howard likened walking into ELS offices as “walking into the inside of a Juicy Fruit wrapper.” Seriously. Sam’s book is also available from amazon.com

OK, that about covers most of the individuals listed in the Allen Letter monthly Memoriam. But it doesn’t solve the challenge of so many stories and Lessons Learned left untold and shared with you and me. How to address this shortfall? First off; decide to ‘tell your story’. How to do so? Easy first step is to phone the Official MHindustry HOTLINE: (877) MFD-HSNG or 633-4764 and request a FREE coy of the recently published booklet: ‘Who Will Preserve Your Legacy…as a manufactured housing or community businessperson? Answer: You!’ So much good info in there for you, including a Five Step Process for preparing one’s personal or corporate story for publication and sharing.

INTRODUCTION. OK, here it is; a second blog posting from COBA7, in one week!
You know the subject matter has to be important, for that to occur! And it is!

When in CA., earlier this week, for MHI’s annual meeting, ‘We’ve Got A Problem!’, relative to overvaluing land lease communities, then oft times profiteering at the expense of homeowner/site lessees, was commonplace conversation among some owners & operators gathered there. Wish I could tell you the matter was on the agenda of the National Communities Council division, but it wasn’t. Point? If national advocacy entities won’t address this timely challenge (‘Maybe it doesn’t have a practical solution after all’), it’ll likely play out on one or another public (e.g. social media) platforms available today. I’d prefer that not happen, but what other alternative is there? MHARR has no land lease community members to engage; NAMHCO is busy recruiting new members; and, COBA7 frankly, is focused on providing unique products and services needed and used by property owners/operators invested in the realty asset class.

So, read what follows with this thought in mind: ‘Where do we go from here?’ Nowhere? Or somewhere that, in time and with effort, helps MAKE MANUFACTURED HOUSING GREAT AGAIN! Achieving that goal translates into more HUD-Code housing shipments, and more filled (now vacant) rental homesites nationwide!

I.

‘We’ve Got A Problem!’ – Revisited….

Upon occasion, this COBA7 blog posting ‘touches a nerve or two’ with readers, and we receive ‘from a few to many’ pithy and thought-provoking responses from throughout the manufactured housing industry and land lease community real estate asset class. And that’s certainly been the case with blog # 503, posted 18 September 2018. Here the sequel….

In the ‘We’ve Got A Problem!’ blog, we endeavored to make this case:

‘Consolidation of Land Lease Communities into Property Portfolios, While a Mature Trend ..Since Syndication Days of the Late 1970s – Appears to now be Spiraling Out of Control and Reason!’*1

Wrote of naive, ‘outside money’ – though not in all cases, corralling larger (i.e. 200+ rental homesites apiece) land lease communities from an already limited, stagnant inventory of such properties nationwide. Then the jacking of rental homesite rates to levels out of proportion with other forms of multifamily rental housing in the same local housing market*2; and, buying new HUD-Code homes with little to no idea ‘how to sell them’, let alone ‘seller-finance them’; often winding up with vacant units or desperation rentals, and troubled income-producing properties..

Anyway, this line of thinking, via blog posting # 503, inspired interesting – and as penned earlier, ‘pithy & thought-provoking responses’ from blog floggers (‘readers’) – all active in one or another segment of the manufactured housing industry. And, in this case, I’ve purposely ‘saved the very best for last’ – so don’t miss it! Here goes…

• “GEORGE. If you’d been a STREET DEALER 20 years ago, you would have written this expose’ from that perspective!” BB Hmm. Think about it. That’d have been 1998, when manufactured housing industry shipped 372,943+/- new HUD-Code homes; mostly via ‘dealers’ into (then) manufactured home communities spoiled by a far more rambunctious housing finance environment than exists today.*3

• No time frame cited here, but: “When we did the right thing for our customer, priced the new home reasonably for them, with profit for us, then serviced the tar out of the customer when needed, what happened? We Won; We Prospered; We Survived to fight another day when times were touch. This focus – provided the customer with a product, service, and price that worked for THEM and reasonably profited us.” NCB

• “Thanks for this! I share some of your concerns. I think one thing big portfolio owners have, compared to small portfolio Mom & Pop-size owners/operators is DEEP POCKETS. They’re able to make waves, while we have to convince a few people to make certain moves, rather than broad-brushing matter(s). An apt example of this is how GSEs (Fannie Mae & Freddie Mac), via Duty to Serve (‘DTS’) plans, are putting MH loans back into their product line. Bottom line for me? I do not see the consolidation (trend) as being too scary at this point in time.” JS

• “I think focusing on the customer can be not only a remedy for many ills in the industry today, but Good for Business. In the Manufactured Housing Manager class I attended, Katie Hauck, MHM, did an excellent job demonstrating the value of a healthy work and community culture, something that’s missing in other investor/operator educational products I’ve seen . Those communities with a sense commaradarie, and ownership that puts the residents first, will have staying power.! Rents will be reasonable, no crazy finance structures in place, just solid, value-based residency and community!” JS (Lightly edited. GFA)

And now this gem from Mike Callaghan of Four Leaf Properties, Chicago, IL. In my opinion, this is a Must Read for everyone owning/operating one or more land lease communities throughout the U.S. today. Mike also presented this important and timely message at the 27th International Networking Roundtable earlier this month, and will do so again, at the SECO Conference in Atlanta, GA., 10 & 11 October. Want to attend? Reach out to genevieve@secoconference.com See you there! Now, back to Mike:

“I’m responding to your ‘We’ve Got A Problem!’ blog, with an unequivocal ‘YES’ response. We officially have a problem!” (What follows has been lightly edited. GFA)

• A number of transactions have recently hit the market, suggesting an irrational exuberance in manufactured housing that’s neither informed or healthy. There is a very large number of new fund managers (‘I probably talk to one or two of them every week, in support of our third-party offerings’), who are highly-attracted to the yields in our space, but don’t have a basic working knowledge of the business model. They’re literally coming out of the woodwork, and they’re also making a premature commitment to the asset class before they even understand it. This reminds me of the ARC, Value Family Properties days.*4 It’s year 2005 all over again.

• Everyone who has owned land lease communities understands there is a silent regulator to profits called obsolescence – it’s definable, it’s measureable, and it has to be rationalized over time. You have to invest heavily in older communities – churn old inventory, upgrade mechanicals, upgrade infrastructure – just to maintain current income levels. That doesn’t even consider the cost of NEW improvements and NEW homes. Everyone wants to focus on the former, but forget about the latter. The barometer of an OER (operating expense ratio) in older communities isn’t 40 percent…it’s closer to 50 percent…maybe even 55 percent, if you’re digging deep.*5 And that doesn’t consider the true cash impact of capitalized expenses.

• I am not suggesting redevelopment isn’t valuable. On the contrary, I think it can be very lucrative and very rewarding. But when the difference between interest rates and cap rates falls below two percent, you’re in negative cash flow territory on anything that isn’t running like clockwork. The market is currently rewarding vacancy almost more than occupancy. As an operator just commented to me last week (one who just received an over-ask offer on four properties), “People are paying me more to sell my vacant rental homesites than they are paying me for the full ones.” That’s 100% true!

• Taking my examples of ARC and Value Family Properties…those models were predicated on buying and operating older communities on razor thin margins, while growing occupancy with (largely) low-end homes. It was simple financial engineering with no backbone. There’s more hungry money on the sidelines now, than was the case 15 years ago, and we’re now a legitimate asset class – conditions that are only making the run-up more acute and more accelerated.*6

Well, that about covers the responses to date. Is there something you’d like to add or contest? If so, please respond ASAP via gfa7156@aol.com or (317) 346-7156. Remember. We’re all in this ‘business environment’ together; so, let’s ‘work together’ to MAKE MANUFACTURED HOUSING GREAT AGAIN!

***

An Important REMINDER. If this blog # 505 winds up being posted on Friday, 28 September, know that’s also the DEADLINE date for submitting completed 30th anniversary ALLEN REPORT questionnaires via FAX: (317) 346-7158. If you need a blank form, phone (317) 346-7156 and request it. My goal is to make the 2019 ALLEN REPORT (researched & published since 1989!) the Best Ever. Why? Think about it…

1. National land lease community portfolio counts over a three decades long period of time: From 25 known (then) manufactured home community portfolios in 1987 to more than 500 land lease community portfolios today, per SWAN SONG; COBA7, IN., 2017, page # 19. Minimum portfolio requirement? Own/fee manage five standalone land lease communities and/or 500 rental homesites.

3. Why (+/-) clarification following annual shipment volume figure? Until year 2013, monthly MH shipment totals, researched and published by the Institute for Business Technology & Safety (‘IBTS’) – HUD’s perennial contractor for this valuable service, were annualized differently by two national advocacy entities representing HUD-Code manufactured housing. NOW there’s but one official annual total. For complete list of annual shipment totals going back to 1955, refer to Figure A in aforementioned SWAN SONG text.

4. Truth be told ,additional names can be added to that list. For example, in my opinion and during my career, beginning with Ellenberg (or Ellenburg) Capital Corp and GEF Communities, Inc., of the 1970s and 1980s; then American Landlease, a REIT, in the 1990s….And the list goes on…

5. For official land lease community chart of operating expenses accounts, see Figure F; again, in the SWAN SONG text, available from COBA7 for only $24.95 (postpaid) via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

6. Asset class legitimacy, for today’s land lease communities, can be traced to the mini-REIT wave in 1994 & 1995, when (then) MHC, Inc., went public as a real estate investment trust, followed by Sun Communities, Inc., and Chateau Communities, Inc. Note. UMH Properties, also a REIT, predates the 1990s REITs by a decade. For list of all land lease community REITs to date, read the 29th annual ALLEN REPORT as Appendix I in aforementioned SWAN SONG.

INITRODUCTION: Are you ready for this? (Unsure I am). Two blog postings in one week: one semi-historic; the other? Well, the title hints at its’ importance: ‘We’ve Got A Problem!’ – Revisited. Read on…and again, in a day or so….

I.

Where Are They Today?

On 31 August 1993, 19 owners/operators of (then) manufactured home communities, from throughout the U.S., attended a day long strategic planning meeting in Indianapolis, IN. Purpose? To organize and effect better national representation and advocacy for the realty asset class, by bona fide stakeholders, before the 1994/5 beginning of the mini-REIT wave.

25 years later, all but six of the original 19 participants have retired, moved onto other business and personal interests, or died. And today, there are three land lease community REITs, and 500 known stakeholder portfolio owners/operators

So, what are the remaining six present and former owners/operators of land lease communities doing these days?

Randy Rowe, formerly with ELS, Inc., (nee MHC, Inc), went on to found, grow, and later sell, Hometown America. Today he heads Green Courte Partners, based in Chicago, and is acquiring his third portfolio of land lease communities!

Kamal Shouhayb, long of Choice Properties & the Choice Group, continues to own a Midwest-based portfolio of land lease communities, now managed by his son Rob; and develops realty in other regions of the world.

Eugene Landy of UMH Properties (nee United Mobile Homes), in this industry observer’s eyes, is the most under-appreciated, self-effacing businessman in the manufactured housing industry! How so? His firm was a real estate investment trust – in the 1980s, before it was popular to be a REIT. And though slow-growing in portfolio growth, Gene has long ensured UMH Properties has been the most active REIT-supporter of national advocacy efforts in behalf of land lease communities via MHI and COBA7.

Brian Fannon, CPM, is a the preeminent journeyman of land lease community development and operations, given his long and successful career in professional property management, and stellar work he’s engaged in today, selling new HUD-Code homes onto rental homesites at the newly developed Oaks at Rockford, in Rockford, MI.

Ed Zeman, continuing his late father’s (‘Bud Zeman’) legacy, continues to own/operate land lease communities throughout the Midwest, including the aforementioned Oaks at Rockford.

George Allen, CPM, MHM. What does one say about oneself? The less the better. Though I am pleased to see the work we began together in 1993 continue under the auspices of: three trade groups:

• National Association of Manufactured Housing Community Owners (‘NAMHCO’), a newly organized national advocate and lobbyist for land lease community owners/operators nation wide. Headquartered in Arizona.

If you’d like to read more of the details describing this history of land lease community national advocacy, beginning with aforementioned 8/31/1993 meeting, read Bruce Savage’s The First 20 Years! PMN Publishing, IN., 2013. FREE for the asking, as long as inventory allows, by phoning the Official MHIndustry HOTLINIE: (877) MFD-HSNG or 633-4764.

Postscript. The September 25th meeting of MHI’s NCC division, in Huntington Beach, CA., was somewhat historic in its’ own right. How so? It was the last meeting, since the NCC was officially launched by MHI on 1 January 1996, to be attended by one of the original 19 community owners/operators who formed the Industry Steering Committee (NCC’s predecessor) on 31 August 1993. So, one might say, There Ends A 25 Year Era!
GFA
***

INTRODUCTION: What follows, ‘Says a Lot’ & ‘Does Little’, beyond expressing angst & frustration concerning the state of land lease community investment in the U.S. today.

We’ve Got A Problem!

Consolidation of Land Lease Communities into Property Portfolios,
While a Mature Trend For This Unique Income-producing Property Type – Since Syndication Days of the Late 1970s – Appears to Now Be Out of Control & Reason

1) Willing & able to pay ‘whatever it takes’ (i.e. inflated value) to corral one or more ground lease communities from the limited and stagnant national supply;

2) Almost always increasing rental home site rates out of proportion with other forms of rental housing in the same local housing market;

3) Then buying new HUD-Code homes they have no idea or experience ‘how to sell’, let alone ‘how to finance’ – leaving them vacant or pressed into service as desperation rentals.

Consequences? In general, sell-out to next fool willing to part with his/her money;

OR, divide the property portfolio up among disgruntled limited partners;

OR, ‘continue to march’ as if nothing untoward has happened, hoping for some degree of capital recovery upon disposition of the property or properties.

All three consequences are occurring simultaneously, in different regions of the country.

All the while, do these ‘Johnny come lately’ property portfolio builders, including those who’ve been around for awhile (i.e. decades) take active and or leadership roles in state manufactured housing association matters, lobbying, education, and networking? Not usually – unless there’s a landlord/tenant legislation challenge, or threat of regulatory action (e.g. rent control), that directly affects them..

Also (almost) gone are the days when sole proprietors developed raw land into land lease communities! Local regulatory barriers to all forms of affordable housing (Recall the deadly zoning triad: NIMBY, her sister LULU; and of course, BANANA!*1) continue to prevail throughout the U.S., despite federal efforts to the contrary. And have you tried to find development capital of late? Good luck with that. Consequently, land lease communities continue to be a scarce investment opportunities – whether ‘under development’ or as acquisition trophies.

Did you know? There is a published list of the ’10 Good Reasons to Own a Land Lease Community’. It’s Appendix II (page # 151) in the second edition of SWAN SONG, ‘George Allen’s History of the LLCommunity Real Estate Asset Class’ & ‘Official Record of MH Shipments (1955-present day)’; COBA7, Indianapolis, IN. 2018. Available for only $24.95 (post paid) via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

So, as a realty asset class, or unique income-producing property type, ‘We have a problem!’. What can be done about it? Not much, unfortunately. This is a Free Enterprise economy, and folk are certainly free to be profligate with their money if they desire to do so – and as we all know, ‘Fools continue to be born every minute’, where buying into the use of OPM (‘Other Peoples Money’) is concerned!

The only hope I see for salvation here; resolving this problem, is for the asset class to ‘grow a resident-focused conscience’ and implement principles of professional property management into all properties, small and large, from top to bottom! Will these two measures occur? Not likely.

It’s just that, after four decades in this business, seeing the same and similar mistakes made time and again, I truly desire to step in ‘more than as a freelance turnaround specialist’; but rather, as a ‘homeowner/site lessee advocate’, to ensure fairness and reasonableness for our customers, clients, residents! Unfortunately, the present day land lease community business model is not structured to function, and self-govern, in such an altruistic (‘benevolent’) fashion.

Bottom line? As long as land lease communities are plagued with profiteering taking priority over resident relations, we’ll not MAKE MANUFACTURED HOUSING GREAT AGAIN! anytime soon.